Saturday, November 10, 2018

Veterans Day 2018

As Veterans Day approaches, on this 100th anniversary marking the end of World War I, our thoughts turn to honoring – and thanking – our nation's veterans for their service. Some veterans, of course, have paid the ultimate sacrifice.
In the past, as readers of this space know, I have written at this time about the history and meaning of Veterans Day and, broadly, why it is important that we honor, in different ways, our veterans.
This time, I'm going to write about a matter closer to home – that is, "closer to home" in the sense of more usual Free State Foundation communications policy fare. I want to call attention to the importance of the FCC's Lifeline program to veterans.
Lifeline is the program that subsidizes telecommunications service for eligible low-income persons. As I said in a recent post, "Lifeline Matters," for at least two decades, I've been a supporter of a properly-run Lifeline program as a "safety net" for low-income persons who otherwise might not be able to afford telecom services. By properly-run, I mean that it is appropriate – indeed, necessary – that the FCC implement measures to curtail waste, fraud, and abuse in the program.
Now, for our veterans. According to recent comments filed by TracFone Wireless, Inc., approximately 1.3 million veterans (12 percent of all Lifeline support beneficiaries) participate in the Lifeline program. I suspect that many readers will be surprised by the size of that number. I am.

But the reality is that veterans, just like all other Americans, often need a safety net too. And, sometimes, as a result of their service, veterans' needs for communications services are more acute than for the population at large.

As TracFone put in its comments:

The Lifeline program plays an essential role in connecting those veterans with opportunities and essential resources. Broadband access allows veterans to stay connected not only with healthcare professionals, 911 emergency services, housing and veteran support services, but also family and friends. It enables veterans to connect with current and future employers and pursue an online education.

TracFone has heard from veterans directly through the Lifeline Facts Campaign about how the Lifeline program has improved their lives. Veterans suffering from a traumatic brain injury, for example, explained how they depend upon their Lifeline connection and mobile device to receive phone calls and automatic reminders about upcoming doctor’s appointments and when to take medication. Other veterans emphasized how important connectivity is for veterans who return home with limited or no support systems, and that it is nearly impossible to obtain a job in the 21st Century without an email address and phone number.

There is no need to belabor the point. To its credit, the Commission has been attentive to the needs of veterans in other contexts. Here I just want to use the occasion of Veterans Day to urge the Commission to keep veterans in mind as it considers the impact of its various Lifeline proposals. In short, to the extent that the Commission acts in a way that generally imperils the Lifeline program, its actions may well impact the 1.3 million veterans in the program too.

In my comments filed in the Commission's Bridging the Digital Divide for Low Income Consumers proceeding in February 2018, I addressed two measures of concern relating to the continued sustainability of the Lifeline program.

Please refer to my comments for more detail, but in short: 

  •  I contended that the Commission should not adopt the proposal to discontinue Lifeline support for service provided over non-facilities-based networks. I stated that "while promoting increased facilities investment is, most often, a worthwhile objective, the primary purpose of the Lifeline program is to promote the affordability of communications services for low-income persons." With resellers presently serving approximately 70% of Lifeline subscribers, I said "the reality today is that facilities-based providers currently are serving only a minority of Lifeline subscribers, so that discontinuing support for resellers would be very disruptive to the program."
  •  I also supported the proposal to allow providers to meet the minimum service standard through plans that provide subscribers with a particular number of “units” that can be used either for voice minutes or broadband service. I called the proposal "a pro-consumer choice, pro-empowerment, pro-market-oriented proposal worthy of adoption." This seems like a sensible way to give Lifeline customers, including veterans, more flexibility to decide how best to meet their own needs. There is no good reason to assume that Lifeline customers cannot determine themselves how to use the quantity of service available to them under their Lifeline plan.
  • Indeed, the Commission ought to reexamine in their entirety the minimum standard regulations adopted in 2016 under the leadership of previous FCC Chairman Tom Wheeler. In their current form, the inflexibility of the mandated standards limiting consumer choice is inconsistent with market-oriented principles. And the mandated increases in the minimum service standard requirements in coming years, in effect diminishing subsidy support, likely will mean the service will become less affordable and limit program participation.
Of course, many of our nation's veterans, especially those who have fought bravely in the service of our country, need various types of help, "lifelines" if you will. Here I have focused only on one. But Veterans Day is a good time to think about other needs and ways of helping as well.

Thursday, November 08, 2018

Federal Court Rules Maryland 6th District Violates Constitution

On Wednesday, a three-judge federal court panel ruled that Maryland unconstitutionally drew the boundary lines for the 6th Congressional District. The decision, which comes one day after the midterm elections, requires Maryland to submit new boundary lines for the 6th and contiguous districts by March 7, 2019.
Governor Larry Hogan, who was reelected for a second term on Tuesday, made the following statement about the decision:
This is a victory for the vast majority of Marylanders who want free and fair elections and the numerous advocates from across the political spectrum who have been fighting partisan gerrymandering in our state for decades. With this unanimous ruling, the federal court is confirming what we in Maryland have known for a long time — that we have the most gerrymandered districts in the country, they were drawn this way for partisan reasons, and they violate Marylanders’ constitutional rights.

Only House Republican On Net Neutrality CRA Petition Does Not Get Reelected

On Tuesday’s election night, Republican Representative Mike Coffman lost his bid for reelection in Colorado’s 6th Congressional district by about 25,000 votes to Democrat challenger Jason Crow. Notably, Congressman Coffman was the only Republican member of the House to sign the Congressional Review Act (CRA) resolution discharge petition intended to negate the FCC’s Restoring Internet Freedom Order which repealed the Obama FCC’s Title II public utility-style regulations imposed on broadband Internet service providers. But Coffman’s pro-net neutrality efforts apparently did not help him get reelected.
When Coffman signed the CRA discharge petition in July 2018, he made multiple statements regarding his disappointment with the FCC’s Restoring Internet Freedom Order.
Interestingly, by signing the CRA discharge petition, Coffman indicated that he agreed with those who want to restore the Obama FCC's order imposing public utility-type regulation on Internet service providers.
In a just a few months, Mike Coffman will no longer be a member of Congress. Some have called his efforts to cross party lines to become the lone Republican to sign the CRA discharge petition a “bold” move. I'm sure there were other factors that played a role in Rep. Coffman's defeat, but taking a position in favor of repealing the Restoring Internet Freedom Order certainly didn't help him.

Monday, November 05, 2018

Spectrum Matters Matter

I know it's a somewhat cutesy title. But spectrum matters do matter. Now more than ever with burgeoning demand for various spectrum-dependent services.

On October 25, 2018, President Donald Trump issued a Presidential Memorandum on Developing a Sustainable Spectrum Strategy for America's Future. This is a welcome development if only because it elevates the priority to be placed on spectrum matters within the Trump Administration.

The memorandum explains that additional spectrum access is not only important for the U.S. economy, especially with 5G wireless technology on the horizon, but it is also important for protecting national security. Given the growing spectrum demand, President Trump recognized that the U.S. must focus spectrum matters with some sense of urgency:

In the growing digital economy, wireless technologies expand opportunities to increase economic output of rural communities and connect them with urban markets, and offer safety benefits that save lives, prevent injuries, and reduce the cost of transportation incidents. American companies and institutions rely heavily on high-speed wireless connections, with increasing demands on both speed and capacity. Wireless technologies are helping to bring broadband to rural, unserved, and underserved parts of America. Spectrum-dependent systems also are indispensable to the performance of many important United States Government missions. And as a Nation, our dependence on these airwaves is likely to continue to grow.

Those demands have never been greater than today, with the advent of autonomous vehicles and precision agriculture, the expansion of commercial space operations, and the burgeoning Internet of Things [IoT] signaling a nearly insatiable demand for spectrum access. Moreover, it is imperative that America be first in fifth-generation (5G) wireless technologies — wireless technologies capable of meeting the high-capacity, low-latency, and high-speed requirements that can unleash innovation broadly across diverse sectors of the economy and the public sector.

To the point that timeliness matters, the presidential memorandum requires federal agencies, including the National Telecommunications Information Administration and the FCC to report within 180 days "on the status of existing efforts and planned near- to mid-term spectrum repurposing initiatives."

NTIA and the FCC are to be commended for their efforts during the last two years to make more spectrum available to enable the offering of innovative new services. So, to suggest that the Presidential Memorandum should spur the affected agencies to act with even greater dispatch is not to be critical.

Here I want to take note of two spectrum bands, by way of example, that are the subject of repurposing initiatives that hold the promise, if resolved in a timely manner, of making spectrum available that can be used to meet the growing demand for wireless services and for what the memorandum calls the "burgeoning Internet of Things."

First, the 5.9 GHz band. In 1999, the FCC assigned the 5.9 GHz band to Dedicated Short Range Communications (DSRC), which was intended to be used for vehicle-to-vehicle safety communications. But in the almost two decades since, the spectrum has remained largely unused for its intended purpose, while automotive safety technologies have been developed in the marketplace using non-5.9 GHz frequencies. Even automakers have stated in comments filed with the Department of Transportation and the FCC that they are moving beyond the DSRC technology to other non-DSRC automotive safety wireless technologies.

On October 29, 2018, the FCC released a report on its first of three phases for testing to determine if Wi-Fi can operate in the 5.9 GHz band without interfering with DSRC. In part the report stated: "We recognize there have been a number of developments since the three-phase test plan was announced in 2016 — such as the introduction of new technologies for autonomous vehicles, the evolution of the Wi-Fi standards, the development of cellular vehicle-to-everything (C-V2X) technology, and the limited deployment of DSRC in discrete circumstances."

In connection with the report's release, FCC Commissioner Michael O'Rielly stated: "The reality is that the entire debate has gravitated away from the type of sharing regime envisioned in the testing. Instead, the Commission should move past this and initiate a rulemaking to reallocate at least 45 megahertz of the band, which is completely unused today for automobile safety." FCC Commissioner Jessica Rosenworcel issued a statement to the same effect.

This is an instance in which the FCC should move forward with dispatch looking towards repurposing this band for the use of unlicensed Wi-Fi services. Repurposing the 5.9 GHz band could lead to more Wi-Fi offloading, which, in turn, could free up spectrum for future 5G mobile networks and spur additional next-generation services and innovations.

Second, the L-band. NTIA and the FCC also should move forward as promptly as possible to facilitate action on Ligado Network's application to use the fallow L-band spectrum to deploy its satellite and mobile network. As Free State Foundation Senior Fellow Seth Cooper stated in a June 2018 blog, the L-band spectrum can deliver advanced satellite technology in combination with terrestrial mobile technology, but, for now, it remains unused pending the resolution of interference claims. In May 2018, Ligado filed an amendment to its spectrum license modification applications in which it stated:

Mid-band spectrum like the spectrum licensed to Ligado is vital to U.S. leadership in 5G because of its reliability and suitability for high-quality coverage and capacity deployment. If the Modification Applications are approved, Ligado will be uniquely positioned to leverage the potential of this mid-band spectrum by offering next-generation network capabilities. Ligado would concentrate on targeted deployments that deliver focused, highly secure and ultra-reliable communications over custom private networks to specific geographic locations that serve the industrial Internet of Things and the emerging 5G markets, particularly in critical infrastructure industry sectors such as rail, trucking, utilities, public safety, and oil and gas.

A May 2016 report by economist Coleman Bazelon projected that Ligado’s hybrid network would generate between $250 and $500 billion in social welfare benefits by relieving growing demand pressure for mobile wireless broadband services. Ligado has affirmed its intent to invest $800 million in satellite and terrestrial network infrastructure with the prospect of creating approximately 8,000 jobs.

If Ligado's applications ultimately are granted, the projected social, economic, and national security benefits to the public, and to the nation, appear to be substantial. I understand that there are continuing claims from various quarters asserting that Ligado's proposed network raises still-unresolved interference concerns, despite Ligado's efforts over the last couple of years to address the concerns in a constructive fashion. Perhaps in this instance – as with the 5.9 GHz band and others too – President Trump's Memorandum will provide the federal agencies involved with a renewed commitment to act in a way that facilitates the repurposing of the L-band spectrum. As Seth Cooper and I said in reply comments in July 2018 in response to Ligado's recent application amendment, working with NTIA, "the Commission should do all it can to reach a final decision on the application modifications in a timely manner."

Of course, sometimes a memorandum is just another memo. But President Trump's Spectrum Strategy Memorandum ought to be more than just another memo. I am not suggesting that it purports to dictate the outcome of the two proceedings discussed here or any others. But I hope that, in this instance, the directive is a signal the Trump Administration intends to address America's growing spectrum needs as "efficiently and effectively as possible" and with a sense of dispatch.

Thursday, October 25, 2018

FCC Modifies Spectrum Rules to Increase 5G Deployment

On Tuesday, the FCC voted on two important spectrum-related items that will help advance 5G deployment throughout the United States.
First, the Commission adopted a Report and Order that changes the licensing and technical rules governing Priority Access Licenses that will be issued in the 3.5 GHz band – including larger license areas, longer license terms, renewability, and performance requirements. By reducing the number of licenses a wireless provider must acquire and the administrative costs of renewing those licenses, these changes will promote efficient use, encourage additional investment in the 3.5 GHz band, and ultimately streamline deployment of 5G networks.
The FCC also adopted a Notice of Proposed Rulemaking that would open up 1,200 megaherts of spectrum in the 6 GHz band to allow unlicensed devices to operate without interfering with licensed services that will continue to use this spectrum. As Chairman Ajit Pai said in his statement: “From Wi-Fi routers to connected home appliances to retro cordless phones for those of us who still have landlines, we use devices that connect via unlicensed spectrum every day. Indeed, they’ve become so popular that there is now a shortage of airwaves dedicated for their use.”
By proposing to free up more unlicensed spectrum, the FCC's action could lead to more Wi-Fi offloading, which, in turn, frees up space on mobile networks and allows for additional next-generation services. 5G wireless deployment is projected to create 275 billion in investment, 3 million jobs, and $500 billion in gross domestic product. And both of these items adopted by the Commission this week could advance the delivery of those economic benefits.


Wednesday, October 24, 2018

Lifeline Matters

As a long-time supporter of the FCC's Lifeline program, I'm was pleased to see that the Commission has proposed to levy a $63.7 million fine on Lifeline provider American Broadband and Telecommunications for engaging in apparently fraudulent conduct relating to enrollment of Lifeline subscribers.

When I say I am "pleased," I am not pleased, of course, that American Broadband engaged in fraudulent conduct, but rather I am pleased that the agency has proposed levying a stiff fine in an enforcement action. For the Lifeline program to be sustainable and to maintain public support, the FCC needs to be vigilant in rooting out waste, fraud, and abuse such as that allegedly committed by American Broadband.

It's certainly no secret that I generally favor free market policies in the communications and Internet space. And the Commission's turnabout under the leadership of Chairman Ajit Pai towards adoption of such market-oriented policies has been most welcome – and most sorely needed. But, as I stated in these comments filed in February 2018 in the FCC's current Lifeline proceeding, "the primary purpose of the Lifeline program is to ensure that low-income persons have access to communications services." In other words, it is what I consider to be a "safety net" program. In that light, and in that context, I opposed the Commission's proposal to exclude resellers from participation in the Lifeline proposal, especially given that they now serve about 70% of Lifeline subscribers.

So, I hope the Commission will continue to act vigorously to root out waste, fraud, and abuse by individual providers – the proverbial "bad actors." That's necessary and appropriate. But I hope, at the same time, it will put aside proposals that would have the effect, even if inadvertently, of gutting the program.


Monday, October 22, 2018

Regulatory Modesty and Toll Free Texting

I just saw that CTIA filed an ex parte regarding a meeting held with Chairman Ajit Pai's wireline advisor, Nirali Patel. CTIA's ex parte says that it "reiterated that the Commission’s recent Text-Enabled Toll Free Number Declaratory Rulingis sufficient to protect toll-free subscribers in the vibrant, competitive and innovative messaging marketplace, and that further Commission action is unnecessary to maintain the rights of toll-free subscribers and protect consumers from unwanted messages." CTIA further states that "text messaging is an interstate information service – and the record confirms that the Text-Enabled Toll Free Number NPRM’sproposal to impose regulations in the messaging market would be inconsistent with the Commission’s light-touch regulatory approach to interstate information services. "
Free State Foundation Senior Fellow Seth Cooper and I filed comments in response to the Text-Enabled Toll Free Number NPRM. In those comments, we explained, in considerable detail, why we agreed with CTIA's two points above.
This is a proceeding that begs for the exercise of regulatory modesty on the Commission's part. There is no gainsaying that, in general, the present Commission, led by Chairman Pai, has been a model for regulatory modesty. In our Text-Enabledcomments, we pointed out that Chairman Pai affirmed his commitment to regulatory restraint at a Free State Foundation event in December 2016 when he declared: “Indeed, proof of market failure should guide the next Commission's consideration of new regulations.”
Our comments in response to the Text-Enabled Toll Free Number NPRMclosed this way:
Clarifying that text messaging services are “information services” – which we believe they are – is a necessary first step in deciding whether, or to what extent, the Commission even has authority for its proposed rulemaking. In any event, given the Commission’s admittedly questionable legal authority to regulate text messaging services, the lack of evidence of a market failure or consumer harm requiring regulatory intervention at this time, and ongoing self-regulatory efforts, the Commission should refrain from imposing any new regulatory mandates in this proceeding.
So, certainly we are in accord with CTIA's statement that "further Commission action is unnecessary to maintain the rights of toll-free subscribers and protect consumers from unwanted messages."

Friday, October 19, 2018

Aggregate Broadband Investment Increased from 2016 to 2017

This week, USTelecom released a new research brief titled "U.S. Broadband Investment Rebounded in 2017." In the report, Vice President of Industry Analysis Patrick Brogan provides evidence that broadband investment totaled $76.3 billion in 2017, an increase of $1.5 billion (or 2%) from 2016 to 2017.
This is significant news because it is the first time that annual aggregate broadband investment grew in three years. As FSF scholars have noted in past blogs and FCC filings, aggregate broadband investment declined each year from 2014 to 2016. (See here, here, and here.) This likely was due to the stringent regulations imposed in the FCC's February 2015 Title II Order, which raised costs for providers and crowded out network investment. Since the FCC repealed the Title II public utility-style regulations in its December 2017 Restoring Internet Freedom Order (RIF Order), the broadband industry has rebounded and aggregate capital investment is growing again.
In a May 2018 blog, I used data collected from broadband providers' 10-K forms to create a sample which found that broadband investment had increased significantly from 2016 to 2017. Although my sample's estimate of the industry's percentage increase was off by quite a bit, my prediction that broadband investment would grow for the first time in three years was correct:
[W]hile my estimate of a 14% increase in capital investment should be considered a fairly rough estimate of industry-wide broadband investment, I am very confident that from 2016 to 2017 broadband providers significantly increased capital investment. In fact, any increase in broadband capital investment from 2016 to 2017 is worth noting because investment declined in both 2015 and 2016.
When regulatory costs increase, as they did with the imposition of the Open Internet Order, broadband providers will invest less than they otherwise would have absent such regulatory costs because the additional costs reduce the return on investment. Although the RIF Order does not take full effect until June 2018, the mere prospect of the FCC returning to a light-touch regulatory regime, along with strong competition among many broadband providers and technologies, appears to have played an important role in encouraging additional capital investment throughout 2017.
Most importantly, this news is a win for consumers because an increase in broadband investment suggests that providers are competing to deploy new networks, upgrade old networks, and/or develop innovative services, all of which benefit consumers.